On Mar 4, 2014, we issued an updated research report on
). The company reported impressive fourth-quarter 2013 results in
January. With the rise in revenues, on the whole, the credit
quality also improved. Alongside, the company hiked its common
stock quarterly dividend. Yet, a low interest-rate environment
and regulatory issues along with litigation risks remain
COMERICA INC (CMA): Free Stock Analysis
FIFTH THIRD BK (FITB): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
PNC FINL SVC CP (PNC): Free Stock Analysis
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Comerica posted operating earnings of 77 cents per share that
outpaced the Zacks Consensus Estimate of 74 cents. Including
litigation-related expenses of $52 million, net income came in at
62 cents per share. Notably, the company has outpaced the Zacks
Consensus Estimate in all the four quarters of 2013, with an
average beat of 6.74%.
In 2013, the company repurchased shares worth $287 million and
declared $126 million as common stock dividends resulting in a
total payout of about 76% of net income to shareholders. Further
in Jan 2014, Comerica's board of directors announced a 12% hike
in the quarterly common stock dividend. Such a
shareholder-friendly approach is expected to act as a catalyst
for the stock.
However, with increasing competition, shift in the portfolio mix
towards lower yielding loans as well as lower reinvestment rates
for the securities portfolio, net interest margin is likely to
continue to be pressurized in the quarters ahead. Notably, in
2013, net interest margin declined to 2.84% from 3.03% in 2012.
Over the last 60 days, the Zacks Consensus Estimate has increased
3.1% to $3.02 for 2014, while it decreased slightly to $3.25 per
share for 2015. Hence, Comerica currently carries a Zacks Rank #3
Key Picks from the Sector
Some better ranked stocks worth considering include
The Goldman Sachs Group, Inc.
Fifth Third Bancorp
The PNC Financial Services Group, Inc.
). All 3 carry a Zacks Rank #2 (Buy).